Israel’s M1 Money Supply Reports Significant Decline, Implying Economic Restructuring and Global Implications


Decline in Israel’s M1 Money Supply: What It Means

On January 29, 2025, Israel’s M1 Money Supply Year-on-Year (YoY) data reveals a steep decline to 1.5% from a previous 2.7%, marking a -44.444% change. Despite being classified as having a low immediate impact, this decline could signal substantive shifts within Israel’s economy and resonate on a global scale.

Understanding the M1 Money Supply

The M1 Money Supply is a measure of the money available in an economy. It includes the most liquid forms of money, like cash and demand deposits. A significant decrease in the M1 Money Supply can indicate reduced liquidity, potentially impacting consumer spending, business investment, and broader economic growth in Israel.

Implications for Israel and the Global Economy

The drop in Israel’s M1 Money Supply may lead to tighter monetary conditions domestically. As the Bank of Israel reassesses its monetary policies, there might be broader implications for global markets. These changes could influence global trade partners, especially those significantly invested in Israel’s technological and innovation sectors.

Investment Strategy: Navigating the Shift

For investors, adapting to this change involves strategic positioning across various asset classes, leveraging both Israeli and global opportunities.

Best Stocks to Consider

  • TEVA – Teva Pharmaceutical Industries: A stable dividend stock with less exposure to liquidity fluctuations.
  • ISRG – Intuitive Surgical: Provides medical devices, with a potential rise in demand regardless of monetary tightening.
  • MSFT – Microsoft: A technological giant with considerable operations in Israel, leveraging innovation from the region.
  • TASE:ORL – Oil Refineries Ltd.: Defensive stock benefiting from global energy demands.
  • GOOGL – Alphabet Inc.: Opportunities arise from its expansive tech footprint and investments in Israel.

Recommended Stock Exchanges

  • TASE – Tel Aviv Stock Exchange: The premier platform for trading Israeli stocks.
  • NASDAQ – Given its technological focus and significant Israeli-linked listings.
  • NYSE – Broader U.S. exposure with resilience to localized liquidity issues.
  • LSE – London Stock Exchange: Offers access to international businesses linked to Israel.
  • BATS – Provides increased liquidity through advanced trading systems.

Options to Explore

  • SPX – S&P 500 Index Options: Can hedge against broader market shifts while offering potential upside in U.S. equity markets.
  • QQQ – ETF Options tracking NASDAQ: Allows investors to benefit from growth stocks linked with innovative sectors.
  • TLT – iShares 20+ Year Treasury Bond Options: Safe haven appeal amid uncertainty.
  • IWM – Russell 2000 ETF Options: Offers exposure to small cap stocks which may be less correlated with M1 Supply changes.
  • GDX – Gold Miners ETF Options: Hedging against inflationary pressures.

Currency Markets Insight

  • USD/ILS – U.S. Dollar/Israeli Shekel: An essential pair showing direct impact from Israeli monetary policy shifts.
  • EUR/USD – Euro/U.S. Dollar: Benefitting from broader European stability and dollar strength.
  • GBP/USD – British Pound/U.S. Dollar: Reflects trade links and potential commodity price movements.
  • USD/JPY – U.S. Dollar/Japanese Yen: Providing a safe haven amid currency volatility.
  • EUR/GBP – Euro/British Pound: Shows economic sentiment between major Europe-based currencies.

Cryptocurrency Opportunities

  • BTC – Bitcoin: Potential for being a hedge against fiat currency fluctuations.
  • ETH – Ethereum: Benefits from a shift towards decentralized finance despite liquidity changes.
  • USDT – Tether: Acts as a stablecoin tied to USD, benefiting from liquidity surges.
  • BNB – Binance Coin: Opportunities arising from increasing usage of Binance’s platform.
  • SOL – Solana: Gains from scalability and increased platform adoption amid digital asset shifts.

While the current data indicates a low impact, the medium to long-term effects on Israel’s economic landscape and global connections, particularly in trade and finance, present both risks and investment opportunities. Remaining informed and agile can help investors capitalize on this transitional phase in Israel’s monetary policy environment.

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Symbol Price Chg %Chg
EURCHF0.94521 00.00000
AUDCHF0.56604 00.00000
USDCHF0.90975 00.00000
USDTRY35.8462 00.00000
USDKRW1454.45 00.00000
USDRUB98.47396088 00.00000
CHFJPY169.536 00.00000
USDBRL5.8747 00.00000
USDINR86.607 00.00000
USDMXN20.658 00.00000
USDCAD1.44764 00.00000
NZDUSD0.56428 00.00000
AUDUSD0.62224 00.00000
USDJPY154.244 00.00000
USDCNY7.2502 00.00000
GBPUSD1.24246 00.00000
EURUSD1.03902 00.00000

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